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ICAC begins new inquiry into Obeid family

ELEANOR HALL: Now to another corruption inquiry into former New South Wales Labor minister, Eddie Obeid.

Only months after an Independent Commission Against Corruption Inquiry finding that he acted corruptly in dealings involving mining leases worth hundreds of millions of dollars, the commission today began hearing a raft of new allegations against the former Labor Party powerbroker.

The commission is investigating how the Obeid family dealt with politicians and bureaucrats who had the power to provide benefits to his family.

Tim Palmer has been at the opening of the hearing and joins us now. Tim, there are three linked investigations here. Just briefly outline these for us?

TIM PALMER: Well, the single link is each involved the Obeid family and their business interests and the various government agencies and politicians. The first one's to do with a series of cafes at Circular Quay, two in particular, that originally through various dealings with John Abood, the brother-in-law of Eddie Obeid, ended up the lessees assigned to an Obeid family company, Circular Quay Restaurants, although the commission describes rather quaintly an Obeid family company but not transparently so.

Now, over time the Circular Quay restaurants were all going to fall under a government review of policy which would see the people that have held the leases have to compete again for the leases when they came up after five years and without having any preference in that bidding process.

Now the various leases were very unhappy about that and Eddie Obeid, through various dealings... there were four ministers over that period, that various people approached. There were a series of meetings. Eddie Obeid was asked at one point whether, why he didn't in retrospect, if he thought he should have told the various ministers that he dealt with about these restaurants that he actually owned some of the businesses down there.

And he said no, because that would have put pressure on them, I believe they had to treat the issue on its merit. So for Mr Obeid at least he's suggesting that he took a stand of principle here, rather than one of trying to seek advantage in getting a better deal for the lessees.

Nonetheless just at the time, just shortly after Bob Carr finished as premier, a change suddenly happened in the draft policy and all of a sudden there was going to be able to be direct negotiation with the lessees about continuing their leases - something which is exactly what the lessees wanted - and shortly afterwards the Obeid's giving much more advantageous conditions for these leases, which - along with another restaurant - worth $2.4 million in lease fees. So you can see how big the businesses were.

They suddenly had to... they suddenly put them to sale, having gained this advantage.

The second tract of this inquiry looks again at Cherrydale Park Farm, the same Obeid family farm that figured so heavily in the coal license inquiries where corrupt action was found. And obviously while those involved hundreds of millions of dollars, it's what's being suggested here happens, the Obeid family wasn't averse to picking off smaller advantages they could get too.

Because the water holdings, the water licenses on that farm - which have been virtually worth nothing at one stage but during the early part of this century had become worth a significant amount of money - again, a government department was looking at what they were worth, how much water that farm was actually going to be granted, and again approaches were made: they were given a license far greater than anyone else in the Bylong Valley.

They were unhappy with that but eventually accepted it. And again, so while a much smaller deal than what was under the ground they were trying to make a significant amount of money from what was above the ground, and again it suggested there are misdealings with the top of the government department there.

ELEANOR HALL: So who's actually on the witness list, Tim?

TIM PALMER: Well, Eddie himself, of course, at some stage. The first witness will be his brother-in-law who did see the person initiating these Circular Quay restaurants inquiry. We'll have people like Minister Joe Tripodi by the end of the week, but also some of the other business figures that have already proceeded in some of the other inquiries - Eddie's son Damian Obeid - it is quite a long witness list.

There is a third tranche of the inquiry and that's to do with approaches to the Government to sell them a system to which they claim they could cut employee sick leave amongst public servants. Once again, it's being examined as to whether they really did it a proper way or whether this was designed in a dealing that again masked the Obeid family ownership of the business, whether it was just designed to get an improper benefit.

ELEANOR HALL: Tim Palmer at the ICAC, the New South Wales Independent Commission Against Corruption Inquiry there in Sydney, thank you.

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